<h1>Moody's: Indian NBFCs' Asset Quality Stable, Short-Term Delinquencies Rise; Loan Growth Outpaces Retail Credit, Heightening Risks.</h1> Moody's Investors Service reports that while non-banking financial companies (NBFCs) in India will maintain broadly stable asset quality, delinquencies may increase in the short term due to the impact of demonetization on collections. The growth in loans against property has surpassed overall retail credit growth, posing higher asset quality risks due to loose underwriting practices and increased competition. Despite gaining market share in retail lending, NBFCs face intense competition from banks, which are focusing more on retail segments. Although NBFCs have adequate capital levels, their capital generation may not keep pace with credit growth, necessitating access to external capital. Funding profiles and costs are expected to remain stable.